Relationship between Environmental Management Accounting Sustainability: Case of SMEs

Abstract

Regulation compliance has become increasingly important as environmental concerns have grown, necessitating the establishment of internal accounting systems to back managerial decisions. Although environmental management accounting (EMA) has grown in importance as a decision-support tool for eco-efficiency, there is little awareness in the literature about its active use in supporting sustainable development. The association between EMA and environmental performance (EP) is uncertain due to inconsistencies in previous research. The particular mechanism by which EMA may change EP remains unknown. The purpose of this study is to look at small and medium-sized businesses (SMEs) in Gulf Cooperation Council (GCC) countries and investigate the relationship between Environmental Management Accounting (EMA) and Environmental Performance (EP), with a focus on the mediating function of green innovation. We surveyed 371 small and medium-sized enterprises (SMEs) in GCC nations using the PLS-SEM methodology and SmartPLS software. The statistical analysis results showed that EMA had a substantial and positive effect on EP. The role of GI as a partial mediator in the interaction between EP and EMA is critical. The study's findings significantly improve the existing literature on sustainability and provide important new insights.